Dell EMC revenue from storage systems in the first quarter dropped 16% from 2016 according to IDC, a fall Dell EMC executives blame on a change in the vendor’s reporting calendar.

Dell EMC uses the Dell Technologies earnings calendar, which is different than EMC’s old earnings calendar. Dell’s first quarter finishes at the end of April, where EMC’s first quarter used to complete at the end of March. IDC compiles its worldwide storage tracker numbers based on the calendar quarter, with its first quarter ending in March.

So what’s the big deal? IDC is counting the same three quarters’ of sales for all the vendors and comparing results to the first three quarters of 2016. But Dell EMC executives say the first calendar quarter of 2017 had no end-of-quarter push for them. Savvy storage buyers know their vendors always make a special effort to close deals in the last month of a quarter, and Dell EMC’s last big push came in April – too late for IDC’s first quarter. Dell EMC cites that as a one-time excuse, so the vendor will have to come up with something else next quarter if sales continue to lag.

Dell EMC president David Goulden noted at Dell EMC World last month that the calendar change would skew IDC Q1 revenue numbers downward for his company, although it remained in the lead. Goulden repeated that during Dell’s earnings call this week. After IDC’s numbers came out Thursday night, senior vice president of marketing Sam Grocott explained how the changes in the Dell EMC revenue reporting calendar impacted the numbers.

“We don’t have that traditional close-of-quarter month counted in Q1,” Grocott said. “That’s a fundamental issue that we will get caught up on in Q2. We’ll just have the end-of-quarter show up in the first month (April). This was a one-quarter blip and will normalize going forward.”

The IDC report compares Dell EMC revenue from the first quarter of 2017 to the combined revenue from Dell and EMC last year.

Dell’s external networked storage systems revenue of $1.42 billion still nearly doubled second place NetApp‘s revenue, but NetApp shaved nearly 16% of market share off of Dell’s lead from a year ago. Dell EMC’s external storage market share of 27.2% slipped from 31.5% a year ago while NetApp increased from 12% share last year to 14%. Compared to the Dell EMC revenue drop of 16% year-over-year, NetApp’s $732 million increased 13.3% from last year. NetApp CEO George Kurian likes to brag that NetApp replaces an EMC system every day at a customer’s site.

Dell EMC’s networked storage market share was 32.6% in the fourth quarter of last year, more than Hewlett Packard Enterprise (10.2%), IBM (10.1%) and NetApp (10%) combined. Dell EMC stayed above 30% share in all four quarters of 2016.

IDC put the total networked storage market at $5.24 billion for the first quarter of 2017, down 2.8% from the first quarter last year.

HPE was third in the first quarter with $511 million and 9.7% share, followed by Hitachi with $449 million (8.6%) and IBM at $440 million (8.4%). All others combined totaled $1.68 billion – more than Dell EMC – for 32.1%. Only NetApp and IBM (up 2.7%) increased revenue year-over-year among the top five vendors.

Dell EMC’s total enterprise storage revenue – including servers – also slipped although it padded its lead a bit. Dell EMC’s total storage revenue of $1.97 billion was good for 21.5% market share, down from 25% a year ago. Dell’s total storage revenue slipped 14.6%. Second-place HPE fell even more, dipping 18.6% to $1.87 billion and 20.3% of the market.

NetApp, which does not sell servers, placed third in total storage with $732 million and 8% share. Hitachi with $460 million and 5% share and IBM with $455 million and 5% share followed. All others combined for 27% market share.

Overall, the total storage market dropped 0.5% to $9.17 billion. The decline among the leading vendors was even greater, but original design manufacturers (ODMs) that sell directly to hyperscale data centers gained 78.2% to $1.21 billion. That reflects a bigger problem for Dell EMC than its reporting calendar. It shows traditional storage vendors are losing business to hyperscale cloud-type data centers.

Grocott said the new reporting calendar likely caused the share loss in flash, too. But Dell EMC does point to midrange storage as a legitimate soft spot in the first quarter.e still have work to do in midrange storage,” Goulden said Wednesday on the earnings call, and expressed hope that new releases of Unity and SC platforms launched during Dell EMC World would shore up that problem area.

Grocott said Dell EMC has made changes and “re-focused” its sales team around its midrange products – which also includes Isilon scale-out NAS – since the merger completed in September of 2016.

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I don't know why, but seeing the Dell name on an expensive EMC SAN just has a way of making it feel cheaper. I think our minds have been too trained to think of Dell in terms of cheap laptops and desktop computers. Personally, I think Dell should have kept the Dell name for just their small business servers and personal computers, then slap the EMC brand on all their enterprise servers and SANs.

Perhaps people are starting to look at Netapp because they just don't like seeing it say "Dell". Or they're worried that they'll end up with some botched Dell update on there (not that EMC hasn't already done that).

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